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Chipotle Mexican Grill, Inc. (CMG): Can Your Smartphone Save McDonald’s Corporation (MCD)?

Would you like some Wi-Fi with that?

Your next Big Mac may be a few app taps away as McDonald’s Corporation (NYSE:MCD) enters the fray of mobile ordering.

The world’s largest restaurant chain is reportedly testing a smartphone app in Salt Lake City and Austin that lets customers preorder their meals. They then have the option of picking up the grub in a store, via curbside pickup, or through the drive-thru window.

Some will argue that it’s about time. McDonald’s Corporation (NYSE:MCD) has been posting sluggish comps since late last year, including a mere 0.2% uptick in domestic comparable-store sales for the month of August. If making the ordering process more convenient while lowering in-store wait times can be achieved through an app, why wouldn’t McDonald’s be all over this?

Smaller yet faster-growing rival Five Guys has a slick mobile ordering app. Boston Market — the rotisserie chicken specialist that just happens to have once been owned by McDonald’s Corporation (NYSE:MCD) — has an app. Chipotle Mexican Grill, Inc. (NYSE:CMG) has had an app for years, and the burrito roller also was once owned by McDonald’s.

McDonald's Corporation (NYSE:MCD)Then again, maybe McDonald’s Corporation (NYSE:MCD) can learn how not to roll out an app by watching its former spinoff. The poorly rated iOS app is limited in that patrons can’t order quesadillas or kid meals from the app. Since anyone needing any of those items will have to snake through the queue anyway, the app is a bit of a deal breaker for anyone who isn’t ordering the flagship items. The Android version is even more useless as it’s limited to less than 200 of the restaurants. The app has been on the market for more than four years, and it still hasn’t gotten it right.

However, what Five Guys, Boston Market, and Chipotle Mexican Grill, Inc. (NYSE:CMG) have in common is that they are mostly eat-in restaurants. Boston Market has several locations with drive-thru access, but Chipotle and Five Guys require in-store pickups. Mobile ordering is a natural in those instances.

It won’t be so easy to rally around the McDonald’s Corporation (NYSE:MCD) app. If a car still has to snake through the drive-thru lane, what’s the point? Adding a dedicated drive-thru lane for mobile ordering sounds like an investment that franchisees will be unlikely to make. Taking a page out of the casual-dining restaurants now offering curbside pickups sound great in theory, but where will these new dedicated curb spots be and will they be visible to the employees who will be bringing out the food? If customers are left waiting too long that can really sour the experience.

Ordering ahead of time to dine in makes more sense, but will that work for both parties? If McDonald’s Corporation (NYSE:MCD) wants to steer customers to higher-margin offerings, it’s easier to do that at the point of sale inside a store, where it can surround the diner with marketing materials. Mickey D’s is also the kind of place where impulse items get tacked on at the register. Will a mobile app be able to stimulate those sales?

We’ll see how it goes. It’s inevitable, even if the initial process will have its challenges and hiccups.

The article Can Your Smartphone Save McDonald’s? originally appeared on and is written by Rick Munarriz.

Longtime Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Chipotle Mexican Grill and McDonald’s. 

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

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